For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden

Taxi driver Harbir Batth feels trapped by the medallion he waited over a decade to buy.

Taxi driver Harbir Batth feels trapped by the medallion he waited over a decade to buy. (Sam Harnett/KQED)

Getting a taxi medallion used to be the dream for cab drivers in San Francisco. Not anymore.

A medallion is the license to own your own cab. It lets you drive when you want, or rent the license out to other cabbies and make some passive income. In the past, a medallion made you an entrepreneur, part of the middle class. So many people wanted one that they were hard to get. Drivers used to sit on a waiting list for more than 10 years. When their names finally came up, the city charged them $250,000 to buy one.

Now, because of pressure from companies like Uber and Lyft, cab drivers are scrambling to get out of the business. For the first time there is a waiting list to sell medallions, not buy them. That means owners who want to get out of the industry can’t, at least not right away.

Harbir Batth is one of those drivers, and he feels cheated and trapped.

I rode with Batth in his cab on a Sunday. It was slow. We didn’t get a single fare for more than 20 minutes. It’s almost always slow now, Batth says. But that wasn’t always the case.

Before the Disruption

The money used to be good, Batth says. You could earn $4,000 to $5,000 a week if you worked six days, 10 or 11 hours a day. It was hard work and decent pay. This is what Batth expected from the United States.

Batth, 51, moved here from India in his 20s. Even though he had a law degree back home, he thought his chances of making a decent living would be better here.

“I was very excited,” Batth says. “I thought this was the land of opportunities.”

In the U.S., Batth had to start over from scratch, so he began driving cabs. His goal became to get a medallion. That way, he thought, he could earn enough money to send his kids to college. And, like many cab drivers, the medallion was his retirement plan. He figured he could make about $2,000 a month from the medallion after paying back the loan and expenses. So, he put his name on the list.

In 2012, more than 10 years after he signed on, Batth’s name came up. He finally had the chance to buy a medallion. Batth borrowed money from friends and family and gathered up his savings to make a down payment. It was a moment he had been looking forward to for years. That moment has since become one of his greatest regrets.

As Batth was buying his medallion, the whole taxi world was getting turned upside down — “disrupted” to use tech lingo, or “Ubered” as taxi drivers say. Lyfts and Ubers poured into the streets, all of them operating without medallions. Suddenly there was an explosion of competition that wasn’t playing by the same rules.

Batth couldn’t believe it. He’d waited for years to buy a medallion. He was on the hook for a $250,000 loan, but he was competing with drivers who had paid nothing to get into the business. Why wasn’t the city regulating the new companies the same way it did the taxi business?

Ride Services Resist Regulations

Uber and Lyft have spent millions fighting regulations across the country. The ride-hailing companies in California are regulated by the state, and the rules generally aren’t as tough or expensive as those imposed by cities like San Francisco.

“I thought … there should be proper rules and regulations,” Batth says. “We have a very corrupt society back in India. With money, anything gets done. I never thought it would be the same in this country.”

Batth says all the new drivers from these companies have cut his income in half.

“There isn’t enough money coming in at home,” he says. “I’m getting old, and I don’t see a future.”

Batth has a son in college and a 9-year-old daughter in third grade. To cover the bills, his wife has started taking care of the elderly. She makes $10 an hour.

Batth wants to sell his medallion, but says the city has told him he might have to wait four years or more. The MTA says that, so far, about 600 people are on the list to sell their medallions. Batth is near the bottom of the list.

“We put all our lives into this career,” Batth says, “and no one seems to give a damn about it — the MTA or the city. They’re just ignoring us.”

Batth say he’s thinking about going back to India, where it will be cheaper to send his daughter to college. But right now he has to keep driving to pay for his medallion. It’s right up on his dashboard, a little metal plate that stares him in the face every time he gets behind the wheel.

For San Francisco Cab Drivers, Once-Treasured Medallions Now a Burden 7 October,2015Sam Harnett

  • Robert

    Yeah I still feel sorry for all the blacksmiths and horse-shoers who lost out when technology or a better way came along. Boo-hoo.

    • MV

      Nice analogy fail. If you think the horse shoe is to the combustion engine as the telephone is to an app, then I hope you’re simply apologizing for “sharing” companies not having to abide by the same regulations and fees. Uber cabs can’t fly or go through time portals. It’s marginally better technology that’s greatly assisted by skirting regulation and volume through massive investment. If however, you believe in a more libertarian version of capitalism, well, that’s a different discussion.

      • SF Sunset Guy

        Uber doesn’t require a franchisee to purchase a 250k medallion to start working either.

        Why should the MTA?

        • MV

          I’m not saying that the MTA should charge that much for a medallion. Just because a system needs reform doesn’t mean it should be upended in favor of of one party over another. The only folks who were in favor of status quo were the taxi companies, and SF always had the worst cab service, at least in my lifetime. Does that mean Uber et al get to play with no rules? Not while I’m a voter.

          • connor

            Unfortunately the system will never see reform until there’s actual competition forcing it to reform. People have been begging for taxi reform for decades.

          • MV

            Ah, so one good pendulum swing deserves another? Surely we can do better than that.

          • SF Sunset Guy

            Can we do better here in SF? This city and county disposes of $25 million per day and has a hard time operating MUNI effectively. I’m not holding my breath.

          • SCCA

            MV you won’t get to vote on anything.

  • thomas

    It’s sad that these poor hard working folks were sold on the merit of a medallion, and then the rug was pulled out from under them. And worse they are stuck with the financial obligation. Hopefully the board of sups or somebody helps them out.

  • Travis

    The taxi industry put these regulations in place to protect their business. They only have themselves to blame. Why the hell did it cost $250k to drive a cab to begin with? That’s who robbed him. Not Uber or Lyft. His own industry.

    • Deke Dotem

      Couldn’t have set it better myself.

    • Scott Danforth

      Themselves? You dont know shit.Fuck you uber lyft and all the rest just wait till you ride in one that gets in a wreck and the insurance doesnt cover your ass you idiot

      • connor

        Sounds like someone who is either a taxi driver or a very crazy person with nothing else to do with her life. Yikes! They can’t even form a coherent, educated response. Like a crazy person on Muni

      • tarniv

        You mean like how Yellow Cab called its drivers “independent contractors” and insisted it wasn’t liable for a accident injuring a passenger in one of their cars?

        http://www.sfgate.com/business/article/SF-jury-finds-Yellow-Cab-liable-for-8M-accident-6352539.php

        You can also blame the SFMTA for creating this medallion sale system, which didn’t exist prior to 2010, and was expanded in 2012 (which is why Batth here could buy one in 2012). When he signed onto the waiting list, it was much longer than the 10 years reported, because when your name came up, you got it for essentially nothing. Medallion holders would hold onto their medallions until they died, renting it out as a de facto pension plan. This new system allowed holders to sell their medallions for cash, and was fought by the taxi industry.
        But then, the taxi industry fought so hard to prevent more medallions from being issued overall, which is why SFMTA was able to get away with a $250k fee for them, why you could never get a taxi when you needed one, and why Uber and Lyft were able to explode so quickly into the market.

        • SCCA

          Uber and Lyft foist the cost of doing business onto the drivers and the public. It costs over $1,000 a month to insure a cab which includes Workers Compensation insurance. Let’s say an Uber driver with no passengers injures someone in an accident and injures herself as well. Her private insurer will investigate and deny the claim if they learn she is an Uber driver. Uber’s insurance won’t pay because there as no passenger and the drivers own injuries will be paid for by the public as well assuming she does no have medical insurance. As for taxi regulation the point is to jot have so many taxis that no one can make a living. Now in SF the pie is cut up so many ways that neither the cab drives or the Uber drivers are making it.

    • Tony BenBrahim

      And the doctor’s put regulation on themselves, as did lawyers, plumbers, accountants, real estate agents, cosmeticians… So what, government bought into it and government is who gets the money, not the industry. The city got the $250K for the medallion.
      Are you ready to live without any regulation whatsoever, in this new disruptive economy where rules apparently are for suckers?

      • SF Sunset Guy

        any regulation whatsoever….hyperbole much?

        And the state puts regulations on lawyers, plumbers, accountants, etc., they’re not solely self-regulating autonomous guilds.

  • connor

    Why don’t he just drive for Uber? The taxi industry has used regulations to protect itself from competition forever. I have very little sympathy for their situation. They’ve created it themselves now they can deal with it. I have not taken a taxi cab since using Uber, and it’s really not because of the cost.

  • I use UBER most of the time and I travel a lot. I heard the same story from the Cab operator in Boston. The situation is worse over there as Medallion cost in excess of $600,000 in Boston. The decline in those prices and line to sell them is common story. http://www.usatoday.com/story/news/2015/05/17/taxi-medallion-values-decline-uber-rideshare/27314735/

    Besides agreeing with Travis, the other big reason is the section of taxi drivers who have no sense of customer service which includes dirty cars, no use of technology like Waze to save sometime and $ to the end customer, no courtsey of running air conditioner etc.
    UBER may not have caused so much huge damage to the industry if the industry had tried to understand the need of customer. Taxi industry was the one that ignored the need of the customer most. (Please donit include limo industry in this)

    I personally feel, still there is a chance for taxi operators if they all come together in each city, decide to get obsessed about customer, bring right technology, clean their cars etc.

    • Jerry McElroy

      I agree. The taxi industry has not changed, it has continuously provided horrible service, and the trust has since been lost since there have been SEVERAL reports of taxi drivers taking longer routes for higher fares. How about trying to hail a cab and get into a verbal fight with another patron who claims they called the cab first? That isn’t cool nor is it cool for taxi drivers to ask you where you’re going and then tell you they can’t take you because they can’t get a fare back. The industry didn’t want to change so technology stepped in. The taxi world can still exist…it just needs to leverage technology, provide better customer experiences, and only then will they see the ability to ‘compete’ with this disruptive shift in the taxi industry. The new sharing economy finally provides some part-time options for many people who have irregular availability. It is funny to me how many people are angry about Uber and Lyft yet they have no insight on how they work or the true benefits they bring. If the taxi industry is pissed about the turn of events, they probably should have listened to their customers rather than trying to gouge their wallets. If it is so bad, why are many taxi drivers becoming Uber and Lyft drivers on the side? They like the constant fares and how they don’t have to fight for business.

  • Tony BenBrahim

    I have some disruptive ideas for new businesses:

    -Sparky’s Electrician: dispatching “electricians” to you for all your repair needs. They will not be licensed, bonded or insured, but hey, trying to be disruptive here, it will be a lot cheaper. And they will not be called electricians, let’s call it “electron” sharing
    -Noah plumbing: dispatching “plumbers” to you for all your repair needs. They will not be licensed, bonded or insured, but hey, trying to be disruptive here, it will be a lot cheaper. And they will not be called plumbers , let’s call it “fluid” sharing.
    -Sonny’s Dialysis: …

    You get the idea, where does disruptive start and regulation end…

    • SF Sunset Guy

      if the Lyft or Uber cars were uninsured, it’s drivers unlicensed you might have had a point. Lyft and Uber aren’t necessarily all that much less expensive, you’re missing the point with respect to the medallion-holders. They don’t require a $250k buy-in.

  • $71 an hour was a “decent” living?! The taxis were just living WAY too high on the hog for the relative level of education and skill necessary (vast majority of adults can already drive, and with basic training can become pro drivers). In addition, they repaid the rent-paying public with awful service in all sorts of ways. That’s why people have no problem booting them to the curve.

    To those comparing plumbers with cabbies and saying that the medallion system was positive – if the journeyman/testing system had a quota or required examinees to pay to play, then it also would be a terrible, corrupt, and rent-charging (parasitic) industry! But it’s a certification system not a restricted (quota + pay to play) licensure system. Thus it’s more consumer-friendly.

  • terminationshok

    That sucks that the MTA stole this guy’s money. It’s just like them too. I have avoided riding in cabs my whole life. When lyft came out, hiring a driver and getting a ride became an option. The taxi industry has been doing nothing but blocking progress for a very long time.

  • Mark Bellamy

    San Francisco is beyond corrupt. He’s angry about removing the corruption of the past where cities extort money from hard working people. The only service SF provides is to unethically steal money from people who do not shout loud enough to get attention. I don’t visit SF anymore out of fear of being harassed.

  • Mallory E. McLaren

    This man should be recruited by a Silicon Valley law firm so he can go do his thing by advising them on Indian law.

Author

Sam Harnett

Sam Harnett is a reporter who covers tech and work at KQED. For the last five years he has been reporting on how technology and capitalism are changing the way we think about ourselves and what it means to work. He is the co-creator of The World According to Sound, a 90-second podcast that features different sounds and the stories behind them.

Before coming to KQED, Sam worked as an independent reporter who contributed regularly to The California Report, Marketplace, The World and NPR. In 2013, he launched a podcast called Driving With Strangers. In 2014, he was selected by the International Center for Journalists for a reporting fellowship in Japan, where he covered the legacy of the Fukushima disaster.

Sponsored by

Become a KQED sponsor